Global Business Today Chapter 6

Front 1

Free Trade

Back 1

The absence of government barriers to the free flow of goods and services between countries.

Front 2

Tariff

Back 2

A tax levied on imports.

Front 3

Specific Tariff

Back 3

A tariff levied as a fixed charge for each unit of good imported.

Front 4

Ad Valorem Tariff

Back 4

A tariff levied as a proportion of the value of an imported good.

Front 5

Subsidy

Back 5

Government financial assistance to a domestic producer.

Front 6

Import Quota

Back 6

A direct restriction on the quantity of some good that may be imported into a country.

Front 7

Tariff Rate Quota

Back 7

The process of applying a lower tariff rate to imports within the quota than those over the quota.

Front 8

Voluntary Export Restraint (VER)

Back 8

A quota on trade imposed by the exporting country, typically at the request of the importing country's government.

Front 9

Quota Rent

Back 9

The extra profit producers make when supply is artificially limited by an import quota.

Front 10

Local Content Requirement

Back 10

A requirement that some specific fraction of a good be produced domestically.

Front 11

Administrative Trade Policies

Back 11

Bureaucratic rules designed to make it difficult for imports to enter a country.

Front 12

Dumping

Back 12

Selling goods in a foreign market at below their costs of production or below their "fair" market value.

Front 13

Antidumping Policies

Back 13

Policies designed to punish foreign firms that engage in dumping and thus protect domestic producers from unfair foreign competition.

Front 14

Countervailing Duties

Back 14

Antidumping duties.

Front 15

Helms-Burton Act

Back 15

Act passed in 1996 that allowed Americans to sue foreign firms that use Cuban property confiscated from them after the 1959 revolution.

Front 16

D'Amato Act

Back 16

Act passed in 1996, similar to the Helms-Burton Act, aimed at Libya and Iran.

Front 17

Infant Industry Argument

Back 17

New industries in developing countries must be temporarily protected from international competition to help them reach a position where they can compete on world markets with firms of developed nations.

Front 18

Strategic Trade Policy

Back 18

Government policy aimed at improving the competitive position of a domestic industry or domestic firm in the world market.

Front 19

Smoot-Hawley Act

Back 19

Enacted in 1930 by the U.S. Congress, this tariff erected a wall of barriers against imports into the United States.